Essays on labor markets in two African economies.

Author: Dabalen, Andrew Lebugoi

Awarding University: University of California, Berkeley, USA

Level : PhD

Year: 1998

Holding Libraries: University Microfilms International ;

Subject Terms: Agricultural economics ; Labour economics ; Wages and salaries ;

Pages: 0

Advisors: Advisers: Berck, Peter/Ligon, Ethan

Abstract:

Empirical studies of labor markets of developing countries, particularly those in Africa, to date have been few and unreliable. They are unreliable because they fail to control for self-selection biases that are common to most labor market participation data. My dissertation, essays on labor markets in two African economies, uses econometric methods that utilize sources of exogenous variation in the data to credibly identify the true causal effect of individual choices on wage inequality in South Africa and Kenya. In the first paper, returns to education in Kenya and South Africa: new estimates, I resolve the problem of sample selection due to endogeneous choice of education by using sources of exogenous variation in schooling levels to identify the true causal effect of education on wages. The main finding of this study is that rates of return to an extra year of education are in the order of 15 percent for Kenya and 19 percent for South Africa. These rates are higher than the Ordinary Least Squares (OLS) estimates found for these markets. They are also higher than iv estimates found for us. The second paper, the effect of unions on wages in South Africa: repeated cross-section estimates, explores the controversial hypothesis that wage inequality in South Africa is partly due to wage setting practices of unions by measuring the true wage gap due to trade unions. The study measures this gap within population groups and for workers with different observed skills. The results show that the average change in union and nonunion wage gap in South Africa is about 10 percent per annum. Starting from a consistent estimate of the gap for a given base year the gap widens by 10 percent annually. In our case, a union and nonunion wage gap of 4.20 percent in 1993 increases to 5.04 percent in 1995. The estimates implied by these changes are closer to european rather than us union wage effects, and are lower than the estimates found by moll (1993) for South Africa. I also find that workers at the low end of observed skill distribution benefit the most from belonging to unions, although the sizes of within-skill wage differentials differ significantly across races. The third paper, employment patterns of female workers in South Africa, examines factors that continue to hamper full participation of married Black South African women in the labor market whether as self-employed or formal wage sector workers. Identification of the parameters of the wage equation are obtained through the parametric 'single index' method with exclusion restrictions. Simulations of the effects of these variables on the probabilities of employment choices show that although fertility and age of motherhood are influential, they are not as strong as expected market wages and education levels of women workers. Furthermore, there is no clear evidence of significant labor supply response from coresident family arrangements. (Abstract shortened by UMI.)